It’s the Relationship, smarty

Think of markets as three overlapping circles: Transaction, Conversation and Relationship.

Our financial system is Transaction run amok. Metasticized. Optimized at all costs. Impoverished in the Conversation department, and dismissive of Relationship entirely. We’ve been systematically eliminating Relationship for decades, excluding, devaluing and controlling human interaction wherever possible, to maximize efficiency and mechanization.

Even the Net has been seen as a way to remove the humanity from markets — one more way to maximize transaction and minimize everything that, from the transaction angle, looks like cost and friction.

With that small pile of theses in mind, check out Peer-to-peer lending hits its stride, in USA Today. Looks to me like the the long tail has a longer tale to tell than can ever be told through the prism of Transaction. One interesting irony is that it appears P2P lending can actually reduce transaction costs.

Anyway, some grist for the VRM mill. Now we really are on our way outa here.

In a vacuum… But business is not conducted in a vacuum. Businesses (at least those that did/do well), always read the tea leaves and keep a finger on the pulse of their customers’ needs. My waiter is a good example. He’s great; and I don’t even know his name (nor he mine). BOTH of us prefer our “relationship” (if you want to call it that) to be strictly limited to the service of the transaction (Note: it’s the chatty waiter that doesn’t notice I need more bread without me having to tell him).

But you and other Cluetrain conductors sound like you’d like him to join you, maybe even take him to a movie or fix up the extra bedroom for weekend romps. You idealize imagined benefits and completely ignore the potential negative ramifications of “relationship.” No Doc, you are wrong. All I wanted was a pleasant meal. All my waiter wanted was a abundant tip. All the restaurant wants is for me to return for the food and service.

But meals aren’t all of business, much of which has highly imagined “relationships” with customers through Customer Relationship Management (CRM) systems that are lame at best. Are you satisfied with those too?

With regard to CRM and “relationships,” again, your frame of reference seems to be “personal.” I am arguing that personal ends up being a HUGE cost with little benefit. Cluetrain sounds good… but isn’t practical; and business is first and foremost practical (by definition; by law).

Why can’t you accept that currency is the currency of the professional relationship. Indeed, in that sense, customers do have complete control and the relationship is clean.

Doc, you seem to want to introduce all sorts of superfluous stuff. I can see why the unkempt and otherwise disenfranchised might find that popular but in the end… again… it’s an impractical ideology… Web or no Web.

Standing up for the unkempt and perhaps otherwise disenfranchised here: Cluetrainism indeed is an impractical ideology. So just strip the “-ism” and take the ride, Amanda. Hyperlinks DO subvert hierarchy; and, interestingly they subvert the predicate logic underlying relational database management systems too. Imagine trying to “normalize” the web! The large scale implementations of Customer Relationship Management systems for the Fortune 1000 are often well intended, based on a recognition that customers are people, in the context of a logistical puzzle that IT automation tools can solve. But every time you’re stuck in voice mail jail, or you and your spouse receive two copies of a heavy, high-end glossy catalog from a retailer you see a failure of CRM. VRM, perhaps, can address my personal entry to the system that is dumping all those catalogs in my mailbox, and help me to save the planet and free up enough marginal savings to like get a haircut or something. VRM can help me identify financial products tailored for me, help me get an adress changed, identify my best automotive options and acquire a ride at the best price.

But I am looking for the big picture here, and it seems that VRM is not possible without people on the inside at the BigCos implementing CRM in a way that is mindful of VRM. The CRM vendors too have a role in providing strategic development plans for the CRMs that will accommodate manageable and secure APIs, flexible implementation of VRM modules that stub up to those APIs, and as important, data architecture planning that makes sense in the enlarged context of BigCo, Customer-base, CRM Vendor, and VRM environment.

I think this sketch addresses both your concerns regarding currency and relationships, Amander. But I don’t want to try to put words in Doc’s mouth. I got it that meals were a metaphor.

Doc, can VRM fix what’s wrong with the Amazon/DHL relationship here in the midwest? Holiday presents arrived late with no notification and I’m peeved.

Amanda, if you are right, and Doc wrong, then advertising would work, and relationships and conversation would be superfluous.

A business that only values the transaction does not get my business. It makes assumptions about who I am and what I want that may or may not be true. When the relationship matters, I have a greater access to information. I make better decisions. Advertising doesn’t do that for me. Conversation does. And it doesn’t matter if it is a waiter or my insurance agent or a customer service rep.

i fail to see how your approach is more practical or effective than what Doc and the Cluetrain guys describe.

As for Amazon/DHL, I dunno. Failure to deliver is its own worst punishment for companies such as those two.

As for VRM, I can’t imagine how putting better tools of engagement in the hands of customers would fail to improve business for everybody.

For what it’s worth, some of those tools (such as those for giving public broadcasting listeners and viewers more and easier and lower-friction ways of paying for the goods they receive) should offer transaction improvements too.

Others, such as providing patients with ways to be the “point of integration” (as well as control) for their own health care data, will save lives.

Others, such as market logic that says, for example, “If I’m calling for tech support, I don’t want to hear a commercial message” — or “I’m willing to pay $x to reach a human being within X minutes” can help drive and improve CRM with hard cash as well as data.

All we’re talking about is providing better ways for demand to engage with and drive supply. The reverse won’t go away. But it will prove increasingly inadequate.

Last but not least, ProjectVRM is a project of the Berkman Center, and of myself as a fellow there. It’s not a Cluetrain operation. Cluetrain is a website that became a book going on nine years ago. It’s not more than that, and never has been. And, while it’s true that David Weinberger and I are both Berkman fellows, we work on entirely different projects there.

“All we’re talking about is providing better ways for demand to engage with and drive supply.”

Indeed, and Frank, Doc, I do see your points; I think your examples are compelling. But, generally speaking… I think it boils down to a corporate attitude of either “dance” or “take it or leave it.” See, I think (I’m certain) that business and the system in which it functions is male. “He” will always manage the dance and frankly always prefer not to. ALWAYS. He just wants to consummate the deal. Period.
With regard to demand engaging supply… sure, but there comes a point where she’s just TOO much trouble. The girl’s got too much baggage. She’s too needy. And business will conclude that she’s not worth it no matter how pretty she is. Know what I mean Vern?

Lastly, as to the reverse proving increasingly inadequate, says who? Not all women are needy. Frankly, it’s a lot of work. I’d rather just be fed, flattered and fucked. 🙂

– Amanda

PS Ed, advertising does work; and no, I do not want to dance with you.

Just a lowly consumer piping in here, but I order many thousands of dollars worth of tech “stuff” from vendors. Guess which vendors I use most often? The ones I trust. Guess which ones I trust? The ones I know, even if slightly, more than their competition.

I just purchased a $16,000 web filter from a man that spent the weekend playing Guitar Hero III on his Wii. It’s easier for me to send money to a person than to a contract. Maybe that’s naive, but it’s true regardless.

I’ve followed another salesman through 3 different companies because of the relationship factor. The company doesn’t even offer the best prices all the time, but that trust based on a person is valuable to me. I’m assured by much more than the contract that things will be done RIGHT. If a mistake is made, my salesman will MAKE IT RIGHT.

Do I want my waiter to sit down with me and have brunch? No, because he’s busy waiting tables. But what about if we’re waiting in line at the grocery store? Yes, you’d better believe I’d have a conversation.

With all due respect Shawn… however sentimental the story, as a senior exec of a Fortune 500 Co., I really don’t care. That’s reality.

Instinct says that customer service is the key to sales. Actually, it’s not. Take McDonald’s: Customer service is at historic lows; and sales have NEVER been better.

The problem with all this relationship crap is that the gurus try to imbue human intuition. The fact is that the profitable corporate animal isn’t human. And for a 1,000 people who insist it be so, there are 100 million who just don’t care.

Fair enough — I think it might be natural for a company to get less personal the larger it gets. And I’ll easily give you the benefit of the doubt when it comes to experience.

Mine is much more a small town type mentality. Not surprisingly, I *live* in a small town as well. Maybe small town folks like myself prefer the relationship because that’s what we’re accustomed to on a daily basis.

I won’t go so far as to say “you’re right and I’m wrong”, however, because I think rural America is a significant “market.”

If you are correct on the larger scale, and I’m wrong — it saddens me. It means that Walmart will take over the world, and we’ll all become more bitter and reclusive as a society.

Oh, and regarding McDonald’s, I think it’s more “consistency” than customer service. Service aside, when you go to McDonald’s, you know exactly what to expect (food-wise). Same with Starbucks. They’re not cheap, rarely have good service, AND they don’t even have great coffee. But you know what you’re gonna get. It’s consistent.

Amanda, some senior execs at Fortune 500 companies care. Some more than others, of course; but some might be enough to make a difference.

And some companies make it a policy to frame their business mission inside of a moral one. One example is Johnson & Johnson, the Credo of which anchors the company’s approach to its markets.

And Shawn, I think having a “small-town mentality” is a good thing, on the whole. And I expect some of those values to start working in relations between customers and larger companies. I might be wrong, as Amanda insists, but I think our ideas around VRM are sound ones and worth exploring.

I also won’t argue with you about McDonald’s, but I will about Starbucks. There are a few good ones. And their coffee itself can be very good. I’m particularly fond of their Cafe Verona blend.

Your comments hit upon the very reason “people are connecting to people” using the current stage of social networks. While the current “system” of social networks, which are nothing more than connecting train cars, it reflects the human desire for connectivity which has been voided by corporate obsession with results, money. for decades upon decades.

The systemic evolution of business has missed the one most important factor, people and relationships. What we are witnessing today via the social web is a discovery, by the people and between people, of the freedom to express and subsequently the connectivity of those expressions with others.

The early stages of transactions, in the form of conversation, will be preceded by social commerce which will enable the economic exchange of value given and value received in numerous forms created by and between people.

This is fun to watch how corporations are reacting and their lack of understand the underlying dynamics of the social web.

Example: We were recently at a meeting with executives of a Fortune 500 company and the discussions were centric to the social web. The issue of social commerce was brought up and the opinions of the executives were that people wouldn’t buy things through their social network profiles and businesses wouldn’t engage is making purchases with other businesses via a social network.

When asked how many of the executives were active participants in social networks 100% answered they were not and 40% didn’t even have a profile on Linkedin. When asked how many of their employees (in excess of 20,000 employees) were active in social networks their answers were “We don’t know”.

How can business executives draw conclusions with no experience or understanding of the dynamic of the social web, relationships? The answer is they do and they will continue to, right or wrong.

The awakening will come when markets move, when competition leads the movement, when executives engage with people who find satisfaction and benefit from engaging with other people, when the world shifts and an alarm ripples through the executive suites.

This thread led me to think about the possible “train wreck at the intersection of business and people”.

Today’s social networks are “train cars” of conversations.

People connect to people they perceive as “headed in the same direction they desire to pursue”. The subsequent conversations reflect common threads of interest. The different train tracks represent different conversations, different platforms, different affinities and different transactions.

f you reflect on Doc Searls comments above you will see a systemic failure of “business” to make progress in the fundamentals of human interaction, relationships. People produce business results and businesses produce relationship results. If we measured the “relationship results” of businesses the scorecard would likely create a failing grade. Businesses have been consumed by financial measures as dictated by public and private markets that measure economics. The social web is creating a new measure of business based on the fundamentals of relationships. The people have known and continue to know how “business has failed them”. It has never been a secret rather business environments have simply controlled the conversations that speak to the relationship issues.

The momentum of a train is based on speed and mass. The faster it moves with greater mass the harder it becomes to stop it and anything in its way simply gets run over.